"With Promotion, Nepal Can Bring In 2B Tourists"

Following a long gap, Nepal Airlines has brought a new A320 Airbus. In that connection, president of European Chamber Nepal and Secretary of Hotel Association Nepal Binayak Shah spoke to New Spotlight. Excerpts:

March 6, 2015, 5:45 p.m. Published in Magazine Issue: Vol: 08 No. -17 March. 06- 2015 (Falgun 22, 2071)

How do you see the state of Nepal EU Trade?

There are huge potentials for bilateral trade. However, our efforts are too small to capitalize those potentials. The current effort is not enough. Europe is a big market as well customer in the world and Nepal is one of the competitors. At a time when all the countries around the world are making efforts to enhance trade with Europe, our promotion efforts are inadequate. Our export to Europe started from handicraft. Then our next product is carpet followed by garment and pasmina. Our list of importing items is limited to those areas. Nepal has a lot of potential in increasing export to Europe. Nepal’s non-timber products like medicinal herbs have great potential in European market. Europeans know about this. We need to extract and process the products. As there is a huge potential of Nepalese medicinal herbs to export in European countries, many European companies have shown willingness to establish processing plants, aiming to export these to Europe. However, they are reluctant to come to invest in Nepal due to Nepal’s current political transition and stalemate. There are many other products, including service sector, with huge potential. As Nepal has large numbers of youths who can work in computer and IT sector, we can export software from Nepal to Europe. As the cost is relatively low in Nepal, software will be another area for Nepal’s potential export. We have to take the initiative in maximizing the promotional activities.

Private sector has been making efforts on its own. However, there is the need to have a lead agency from government. Under its economic diplomacy program, Ministry of Foreign Affairs has been making some efforts. I have to admit that economic diplomacy is not going on at the pace as it needs to be. As there are also a large number of Non-Resident Nepalis (NRN) and interest groups, what Nepal needs to do is to conduct promotional activities by bringing them together? If we mobilize all these available ventures, we can complete a lot of work even within a limited budget.

Only after the political settlement, economy will receive focus. However, there is very much uncertainty on when Nepal can achieve a political settlement. We are now in a wait and see game. The question is how long we go this way.

Traditionally, Europe has been a major market for Nepalese products. At one time, export of carpet was a major foreign currency earner for Nepal. However, it is reportedly shrinking day by day. How do you look at this?

Of course, Europe, particularly Germany, used to be a major importer of Nepalese carpet. However, Nepal is unable to increase its export to Europe. Take for example carpet. It is a trend and fashion and person with affordability can buy it. Germany is a major buyer of Nepalese garment. Europe is still a major export market for Nepalese products like carpet and Germany is still largest market for Nepalese carpet. Carpet is basically exported to Germany and our buyers are from major German cities like Hamburg, Frankfurt. The businessmen from those cities trade Nepalese carpet all over Europe.

As the purchasing power of people living in new economies like Romania, Czech, Slovakia, Poland, and Hungary increases, Nepalese products like carpet, garment, pashmina, handicraft and herbals will have good market. However, the problem with us is that our promotional network is poor. These countries are also source of our product from Germany and it will increase overhead cost due to transportation, commission margin and so on. At the same time, the buyer has a limited choice. Thus, our chamber has been focusing now on these non-traditional markets. Due to limited resources of ECC- Nepal, the promotional activities are also limited. There is the need to go for intensive promotional activities and the government needs to take the lead. For instance, Trade Promotion Center can make a difference if it functions like Nepal Tourism Board which has been promoting Nepalese tourism collecting money from tourism sector. Trade Promotion Center has promotional capability as Nepal Tourism Board. However, TPC does not have the budget as NTB.

After almost two and a half decades, Nepal Airline has brought new aircraft from European company Airbus. How will it have implications on Nepalese tourism sector?

Importing two airbuses, Nepal has increased its business confidence. Although it is not a big deal to buy an aircraft, sometimes, small things can bring a lot of happiness and pride for the country. Bringing new aircraft boosted Nepalese business mindset. This will also enhance the capability of national flag carrier of Nepal. This will also help to expand tourism. It will have a greater impact on National economy. Along with adding new aircraft, Nepal Airline also needs to increase its management skill. Nepal Airline needs to upgrade its system.  For this we need to go for franchising with established European Airlines. We need to do something for either in sub-franchise contract and managing contract. My hunch says that there is some consideration on this part. With some arrangements, Nepal Airline will lease new life in competitive market.

As a secretary of Hotel Association of Nepal, how do you see the state of tourism in Nepal with the arrival of new aircraft?

It has sent a very strong message. As numbers of hotels are expanding, by next five years, there will be more than 2000 beds in star hotels, including 3 and 5 stars. After increase in such numbers, the present arrival of 800,000 tourists will be peanuts. With the partnership between the government and private sector, we need to achieve our target of bringing 2 million tourists by 2020. Although there is a plan and slogan, it is yet to move in a way so it can achieve success. The new national flag carrier airbus is an added advantage as we can bring more tourists by making strategic alliances with European Airlines. Unlike in the past, there is no relevance of season and off-season. Our major tourism market is now India and China. We can bring a maximum number of tourists in Nepal. Both the countries are favorable to Nepal. China has already listed Nepal as destination country for Chinese tourists. India is traditionally the major tourist market and Indian tourists always retained their highest position in Nepal. After assumption of prime minister's position by Narendra Modi, he has already made certain decisions to benefit Nepal. Recently, Indian government has listed Nepal as tourist destination for Indian civil servants. With the announcement, Nepal’s market is now open for 6.8 million civil servants. They can get up to 75 percent subsidy to visit Nepal. These new developments will likely help bring two million tourists in Nepal. It is not difficult to bring two million tourists in Nepal. We need to start a promotion campaign.

The long time defunct Nepal Tourism Board has been revived again. We are also doing our best to bring two million tourists. Government has also shown interest as well as Nepal Tourism Board is moving. If Nepal Airline focuses its flight to India and China, we can bring a large number of tourists.

How do you think the new team of NTB can bring changes? 

Along with the new team, NTB also needs to limit its heavy politicization. NTB has come out from the early stage of confusion and confrontation and there are also enthusiastic new board members. The government policy has also changed. Learning from past mistakes, we can do a lot of good work.

Why is the number of tourists visiting from Europe declining?

There is a certain reason behind that. First of all, we have to look at the present state of political affairs of the country. Although European countries have not issued anything, countries like USA and Australia have already issued travel advisories for their citizens that have large implications. Most of the tourists visiting Nepal are young. Everybody wants to see the use of their money in the best place. The level of insurance premium has gone up. The recent avalanches have increased the risk in Nepal as the premium of insurance. Travel Premium is high. We are yet to develop packages for long stay. We are still following traditional promotional method. However, we need to develop special packages like butterfly, bird watching and vegetation watching. We need to move in an innovative way. There are also incentive tourists. We need to have package tourists. We need to bring the people with a lot of money. Some hotels in Kathmandu are selling their rooms, in ranges from 1000-1500. They have been doing it in small scale but most of the tourists are from Europe. We need to increase promotional activities. Another reason is high airfare.  The airfare of Kathmandu is extremely high. An European gets ticket in half a price to fly to similar destinations for same length like Nepal. It is very difficult to get ticket and it is too expensive. As a regulatory body, Civil Aviation of Authority Nepal needs to intervene in the price. There is a monopoly of airlines. Nepal is a paradise. We can bring a lot of tourists.

What preparation have you have been making for Milan Expo?

There will be World Expo in Milan, Italy, which start from May 2015. Expert of our chamber is participating in the expo. We have to work as per the theme of the expo. We have to work on the theme of food for energy. The objective of the theme is to make balance between have and have nots. Nepal has also been suffering from food security. As productivity is declining, we need to go for alternatives. We are now building a typical Nepalese village in our Pavilion. We are creating vibes in Italian media through our campaign.

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